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Successfully Navigating the Journey to

Patient-Driven Groupings Model

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PDGM's Impact on Your Operations

PDGM implements a budget-neutral payment approach that shifts payment to better align with patient needs

Admission Source

Admission source, which is determined by the healthcare setting that was utilized 14 days prior to home health admission, will affect reimbursement. Each 30-day period is classified into one of two admission source categories – community or institutional. Patients coming from the community will have a lower reimbursement amount for the payment period than patients coming from an institutional setting.


Home health organizations newly enrolled in Medicare on or after January 1, 2019 will not receive split percentage payments.

Home health organizations enrolled prior to January 1, 2019 will continue to receive split percentage payments until 2020.

Functional Ability and Documentation

With PDGM, it is critical that an accurate assessment is performed to demonstrate functional ability for correct scoring on the OASIS. Secondary diagnoses should also be properly documented as comorbidities can increase reimbursement up to 20 percent.

Documentation at the point of care will be essential with the new 30-day periods. Electronic Health Records (EHR) will facilitate getting paid faster and streamlining operations.

The Key Changes of PDGM


Early episodes are defined as the first 30-days. The subsequent 30-day periods are classified as late.

Admission Source

Each 30-day period is classified into one of two admission source categories – community or institutional – depending on which healthcare setting was utilized in the 14 days prior to home health admission.

Clinical Groupings

Each 30-day period is grouped into one of twelve clinical groups based on the patient’s principal diagnosis which describes the primary reason for which patients are receiving home health services under the Medicare home health benefit.

Functional Impairment Level

PDGM designates a functional impairment level of low, medium, or high for each 30-day period based on eight functional OASIS questions.

Comorbidity Adjustment

PDGM includes a comorbidity adjustment based on the presence of secondary diagnoses. Depending on a patient’s secondary diagnoses, a 30-day period may receive no comorbidity adjustment, a low comorbidity adjustment, or a high comorbidity adjustment.

Payment Groupings

Each 30-day period is categorized into one of 432 case-mix groups. The subcategories are the following: admission source, clinical grouping, functional impairment level, and comorbidity adjustment.

LUPA Thresholds

The thresholds vary for every patient group. This model can vary from two to six visits every 30-day payment period.

Revenue Cycle

There will be two units of 30-day periods. Each 30-day period will have its own RAP and Final with its own case-mix weight.

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Frequently Asked Questions

For now, it only affects Medicare reimbursement. However, private insurance often follows CMS’ lead so it could eventually be adopted by managed care payers.
Most likely. Some will see positive, some neutral, and others may see negative impacts.
The areas that home health organizations need to assess are:
  • Therapy thresholds
  • LUPAs
  • Non-specific coding
  • Referral sources and the tendency for agencies to focus on institutional referrals rather than community referrals
  • 30-day billing periods
The behavioral adjustment represents a potential 6.425 percent decrease in reimbursement for changes related to LUPAs, comorbidities, and diagnosis codes.
PDGM is a billing initiative and not a clinical one. Maintenance therapy will remain a skilled service under PDGM, however, therapy thresholds will no longer apply.
Educate your staff and referral sources on PDGM. Using data analytics and impact studies, organizations can determine their PDGM risk and develop an individualized plan to mitigate their risk. Ensure that there is alignment of partnerships in coding and software vendors. Along with operational and financial changes, organizations should have a clinical refocus on intra-episode management.